The Impact of the Federal Budget Deficit on the Nominal Interest Rate Yield on U.S. Treasury Notes, 1979-2001
This study empirically examines the impact of the federal government budget deficit on the nominal interest rate yield on U.S. Treasury notes over the 1979-2001 period. In a system that includes the monetary base, the civilian labor force unemployment rate, the ex ante real 52 week Treasury bill rate, and the percentage real growth rate of the S&P 500 stock index, ECM (error-correction model) estimation finds that the total federal budget deficit acted to increase the nominal interest rate yield on seven year U.S. Treasury notes over the study period
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Volume (Year): III (2004)
Issue (Month): 2 (March)
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- Hoelscher, Gregory, 1986. "New Evidence on Deficits and Interest Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(1), pages 1-17, February.
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- Cebula, Richard, 1996. "An Empirical Note on the Impact of the Federal Budget Deficit on Ex Ante Real Long-Term, Interest Rates, 1973-1995," MPRA Paper 51414, University Library of Munich, Germany.
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- Cebula, Richard J & Belton, Willie J, 1993. "Government Budget Deficits and Interest Rates in the United States: Evidence for Closed and Open Systems Put into Perspective, 1955-1989," Public Finance = Finances publiques, , vol. 48(2), pages 188-209.
- Cebula, Richard J. & Saltz, Ira S., 1998. "Ex Ante Real Long-Term Interest Rates and U.S. Federal Budget Deficits: Preliminary Error-Correction Evidence, 1971-1991," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 51(2), pages 163-169.
- Feldstein, Martin S & Eckstein, Otto, 1970. "The Fundamental Determinants of the Interest Rate," The Review of Economics and Statistics, MIT Press, vol. 52(4), pages 363-375, November.
- Cebula, Richard J, 1988. "Federal Government Budget Deficits and Interest Rates: An Empirical Analysis for the United States, 1955-1984," Public Finance = Finances publiques, , vol. 43(3), pages 337-348.
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